Samsonite Is Growing Fast In India

Samsonite Is Growing Fast In India

Samsonite Is Growing Fast In India
Samsonite Is Growing Fast In India | Source

Samsonite Is Growing Fast In India

New Collection of Vintage II Luggage

Samsonite has introduced a collection of SBL Vintage II luggage. The collection consists of mini bags, spinners and duffel bags showcasing rich fabric, herringbone pattern and leather detail. It is priced at Rs.24000. In September last year, American Tourister from Samsonite launched the third part of its ‘Survive’ campaign series in Mumbai with a music video. American Tourister is a mass premium luggage brand. The brand has a market share of 30% in the organised luggage market. But this is only a self claim and is not substantiated by any survey or poll. Organised luggage market is worth Rs.1500 crore in India. But unorganised market is worth two times than this. American Tourister brand was launched seven years back.

Life’s a Journey

Samsonite has captured the fascination of Indian travellers over the years. Its ‘Life’s a journey’ slogan has become very popular. It has a century of international experience in travel luggage industry. Samsonite has presence in over thirty Indian cities. In the last six years, Samsonite’s growth in India has been phenomenal. Travel market is witnessing a growth of 25-30 per cent every year notwithstanding the slowdown in the economy. Air travel is also increasing. Along with air travel, organised luggage sector is also growing. Samsonite has exploited this trend fully and increased its market share in the last couple of years.

More People Switch Over To Organised Brands

Along with luggage, Samsonite is able to increase its sale of other products like day bags, business products etc. Air travellers always choose only branded luggage for their purchase whereas road and rail travellers mostly go for unorganised sector products. But even here, many people are switching over to organised branded luggage for their travel as it enhances their style and personality among their friends and relatives. Carrying a branded luggage has also become a status symbol for many.

Clever Differentiation of Products

Samsonite has more than 300 stores set up in India in different places. Samsonite brand caters to the needs of the business traveller whereas people prefer to buy the American Tourister brand for leisure travel. Both the brands enjoy fine craftsmanship, high quality, enduring style and reliability. Samsonite’s Indian operations started in 1996 as a 60:40 joint venture with Tainwala family. Samsonite’s net sales turnover is of the order of Rs.800 crore. Both the brands sell equally well. Samsonite put up a 50% growth in 2010 and the same growth momentum was expected to be maintained in 2011 also. Samsonite has made a clever differentiation in its luggage product. While Samsonite brand caters for the premium end of the market, American Tourister is exclusively focussed at the middle market segment. Its competitor VIP also has two brands namely VIP and Aristocrat. Perhaps Samsonite has copied this trick from VIP.

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Samsonite Is Growing Fast In India

Samsonite Is Growing Fast In India
Samsonite Is Growing Fast In India | Source

Samsonite Is Growing Fast In India

Double It’s Turnover Once in 2.5 Years

Samsonite has planned to double its turnover once in every two and a half years. Samsonite depends on airline industry for its growth. If the airline industry is booming, then Samsonite’s sales will also boom. But right at the moment, airline industry is not doing well in India and in fact worldwide. Therefore Samsonite is also facing a slowdown in sales. However, travel in other modes of transport like rail and road has not slowed down. Samsonite has also diversified into different products and is not dependent on luggage sales alone. Today Samsonite is dependent on luggage only to the extent of 60%. It has diversified even into footwear market.

Targeting Lifestyle Consumers for Future Growth

For future growth, Samsonite is targeting at lifestyle consumers. Subrata Dutta is the Managing Director of Samsonite India. In India, Samsonite has to compete against VIP which has more than 50% market share in the organised luggage market. Samsonite International S.A. is the world’s biggest luggage company even though it is second in India behind VIP. Samsonite plans to raise $1.5 billion in Hong Kong through an initial public offering (IPO). Samsonite will be selling 671.24 million shares in the IPO, equivalent to 48% stake in the company. The price range will be 13.50 - 17.50 Hong Kong dollars. It can also raise an extra $200 million in case of oversubscription to the extent of 15%. The amount raised will be utilised to settle the debt.

Foraying Into Footwear

Samsonite was founded in Denver, Colorado in USA in 1910. As the US and European markets are facing difficulty due to economic crisis there, Samsonite, like other Western companies, has decided to spread eastward. It is focussing on Chinese and Indian markets for growth. Samsonite plans to add 25 stores in India every year and targets a turnover of Rs.1500 crore in the year 2013. Samsonite is also planning to launch a sub-brand of affordable footwear priced below Rs.3000 targeted at Indian market. At present Samsonite’s footwear starts at a price of Rs.3000 and goes upwards. The price conscious Indians do not like to spend too much on their footwear and like to acquire cheap rate shoes with good looks. Here again, the unorganised sector scores over.

Riding With Cricket

India contributes 6.6% of Samsonite’s global turnover of $1.2 billion. Earlier, Samsonite had licensing arrangements with big brands such as Lactose and Timberland. But now it has discontinued this arrangement. In fact Samsonite can open more stores in tier-2 and tier-3 Indian cities and market its American Tourister luggage and other products. That will produce a good growth for the company in India. American Tourister is growing at 70% per annum as against 40% per annum by Samsonite brand. Samsonite has selected a new digital advertising agency Ignitee for advertising. It has earmarked Rs.50 crore for advertising expenses. Samsonite has appointed celebrity commentator Harsha Bhogle to spread awareness about its brands through his online blog space. The blog caters to cricket matches and attracts a good view of readership.

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